At times, the pair acts as a barometer for risk appetite in markets. As Middle East tensions escalated on Friday, EUR/CHF did fall to a low of 0.9306 but the pair is now up over 100 pips from that currently. The nudge higher today comes as we are seeing risk appetite recover back some ground. European indices are slightly higher on the day with S&P 500 futures up 0.5% currently.
Iran and Israel are still continuing to wage war against one another but broader markets are starting to look past that already. I'd imagine from here even if we did a significant escalation where risk sentiment gets knocked again, the move would be to buy the dip. This is a market that is quick to forget and even quicker to want to move on to the next thing. That especially when it comes to bad news.
In the bigger picture, there's still that ongoing narrative of corporate selling versus retail buying. But I'd leave that story for another post.
Circling back to EUR/CHF, the bounce fits with the broader theme we're seeing today that markets are slowly fading the Middle East tensions.
The pair is now back up to 0.9409 but faces key resistance around 0.9425-30 next, as seen on the daily chart. Since the selloff from Trump's reciprocal tariffs announcement in April, the pair has largely been contained between 0.9300 and 0.9400. So, that represents the range play for price action with the potential for a breakout chase on either side.
To the downside though, there is still key support from the August 2024 low at 0.9210 to consider as well. That helped to arrest previous drops in November last year and in April this year.
This article was written by Justin Low at www.forexlive.com. Read More Details
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